Bankers who are not involved in international banking think of it as a glamour business. You fly across the ocean first-class, and when you arrive you are put up at the best hotels, eat at the best restaurants, and meet the cream of the business community.
What is better yet is to represent the bank at the resident office in an attractive foreign country. Most banks that loan abroad have official residences, chauffer-driven cars, and all the perks you see in movies. Right? Only partly.
A number of years ago I went to Asia under the protective wing of Citibank. Not only was I teaching its economics course for employees, but some of my former students at NYU on Wall Street had become top officers in Asian cities. So I went with letters of introduction and appointments that showed me what their lives could be like at the best.
I remember being entertained at the Manila Polo Club and at a party in a banker's home. It was like being in India under the Raj.
At the party we talked mainly about how the Philippines could get more dollar investments. But my host told me when the evening was over that the head of a government investment bank had pulled him aside and asked him to place a substantial amount of dollars in New York for him for a private account.
In Bangkok, Citi arranged for me to meet the head of a local correspondent bank. It was quite an experience. When he called for tea, the servant came in on his knees, bearing the tray ahead of him like the aide of an 18th-century potentate.
After our tea the banker put his car and driver at my disposal for a full day to take me to the bridge over the Kwai River. I wondered why he was so nice to me - that is, until I got home and found a letter asking me to get his son into Rutgers.
This is what I saw. But talking to international bankers can give a lot less exciting picture.
When everyone else goes to bed, you have to write up your reports for the home office to accommodate its time zone.
Lending challenges can be difficult. Accounting and legal standards are different, there is far less transparency of data, and when there is a disagreement the local legal authorities nearly always favor the local individual over the American bank.
But the most serious problem that banks with international departments face is this:
Schmidlap works in the department's New York headquarters. He commutes two hours each way to his desk, where he shuffles papers all day, backing up the international lenders.
Then comes his opportunity: He is picked to work in a foreign office.
Out he goes, with his family, to a bank home with bank servants and driver. And he revels in the bank social functions Everything is great, except for one thing:
There is nothing worth lending money on.
He is afraid, though, that if he lends nothing he will be summoned back to the four-hour commute and the anonymous desk job. So he makes loans that he knows he really should not.
John LaWare, who was the CEO of the old Shawmut Bank and later a Federal Reserve governor, once told me that Shawmut fired one of its best international men because he made no loans. That refusal saved Shawmut millions, Mr. LaWare said, but this was 20-20 hindsight.
And as for the first-class travel, it's business class now or sometimes even (gulp) coach.
